Global brokerage Jefferies has initiated a 'Buy' rating on Kalyan Jewellers, setting a base-case target price of ₹830. The outlook follows robust Q2 FY27 results, where the company reported 26% year-on-year revenue growth. The brokerage highlights the retailer’s aggressive expansion using a franchisee-led model and disciplined debt reduction as core drivers for its optimistic stance.
Global brokerage Jefferies has initiated coverage on Kalyan Jewellers with a 'Buy' rating, setting a base-case target price of ₹830 and a bull-case target of ₹1,000. This outlook follows the company's strong performance in the second quarter of the 2027 fiscal year, where consolidated revenue grew by more than 26% year-on-year, and India-specific revenue increased by approximately 27%.
The brokerage’s positive stance is driven largely by the company’s adoption of a franchisee-led expansion model, known as FOCO (Franchisee Owned, Company Operated). This model allows Kalyan Jewellers to expand its showroom footprint rapidly while keeping capital spending controlled. In Q2 FY27 alone, the company added 22 new showrooms, significantly increasing its reach in a market where a large portion of the jewellery trade remains unorganised.
Financial discipline has also been a focal point for the company. Kalyan Jewellers has actively worked on strengthening its balance sheet, successfully reducing its non-gold metal loan debt by ₹564 crore in the previous fiscal year. Management has expressed an intent to reach a debt-free status regarding these specific metal loans by the end of fiscal year 2027. This move to reduce interest-bearing obligations is seen as a positive step for improving future cash flow and profitability margins.
Despite the optimistic growth projections, the company faces inherent risks typical of the jewellery sector. Fluctuations in international gold prices remain a significant variable that can impact consumer demand and overall profit margins. Furthermore, the Indian jewellery market is highly fragmented and competitive. The company must continue to navigate this intense competition from both national players and local, unorganised jewellers who often have deep roots in specific regions.
For investors, the key monitorable will be the sustainability of the store expansion pace and the execution of its debt reduction goals. The company’s ability to maintain high same-store sales growth while adding new outlets will be crucial in justifying the valuation multiples suggested by analysts. As of the close on October 8, 2026, the stock was trading at approximately ₹553.50, and market participants will likely watch how the company’s operating margins hold up against the backdrop of fluctuating gold prices in the coming quarters.